Mahogany Ridge Developments Pty Limited v Port Stephens Council & Anor

KEY ISSUES: Development Application :- motion to strike out - failure to take steps to proceed to hearing - development application required to be accompanied by species impact statement - no species impact statement - appeal commenced in 2004 - further lengthy adjournment required to ascertain date by which species impact statement could be completed - appeal dismissed

Environmental Planning and Assessment Act 1979 s 78A(8)(b) Land and Environment Court Rules 1996 Pt 12 r 2, Pt 13 r 5 LEGISLATION CITED: Native Vegetation Act 2003 Native Vegetation Regulation 2005 cl 35 Supreme Court Rules 1970 Pt 13 r 5

Dunlop v Coffs Harbour City Council [2006] NSWLEC 663; CASES CITED: Mahogany Ridge Developments Pty Limited v Port Stephens Council & Anor [2006] NSWLEC 657; Marinkovic v Rockdale City Council [2006] NSWLEC 601

APPLICANT Mr S Brockwell SOLICITORS Norman Waterhouse

FIRST RESPONDENT LEGAL REPRESENTATIVES: Mr J Maston SOLICITORS Sparke Helmore

SECOND RESPONDENT Mr C Drury (solicitor) SOLICITORS DLA Phillips Fox

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

MAHOGANY RIDGE DEVELOPMENTS PTY LIMITED Applicant

PORT STEPHENS COUNCIL First Respondent

THE COMMONWEALTH OF AUSTRALIA Second Respondent

JUDGMENT Jagot J: 1 This is a notice of motion by Port Stephens Council, the first respondent in a Class 1 appeal, seeking an order that the proceedings be dismissed and associated orders for costs.

2 This is not the first occasion on which the Council has sought by notice of motion to have this Class 1 appeal dismissed. According to a chronology prepared by the Council's solicitor forming part of an affidavit which was read into evidence on the notice of motion, the Council made similar applications on 20 June 2005 and 18 August 2006. In order to understand the circumstances that caused the Council to do so I should briefly record some parts of the background of this matter.

3 The applicant lodged a development application with the Council on 30 June 2000 proposing a large tourist facility development consisting of accommodation establishments, restaurants, community facilities, an arts and crafts village, a theatre, a large lake and dam, a helipad, associated car parking and works. The proposed accommodation involved 3046 beds. That development application was not determined until 3 March 2004.

4 The applicant appealed against the Council's determination of the development application in or about May 2004. The proceedings had their first callover on 21 June 2004. Thereafter, the proceedings were fixed for hearing on 20 to 22 September 2004. However, in August 2004 the applicant's solicitors changed. In consequence, the applicant applied to vacate the hearing date. The Court acceded to the applicant's request to vacate the hearing date and made various orders relating to the future conduct of the proceedings on 3 September 2004.

5 As part of those arrangements, the proceedings were listed for a case management conference before the Senior Commissioner of the Court on 26 October 2004. At that time extensive directions were made to ensure that the matter could proceed to hearing, including directions for a joint expert on ecological issues. These ecological issues arose because, in the Council's statement of issues filed on 11 June 2004, the Council put the applicant on notice that there was an absence of adequate evidence to assess the impact of the proposed development on flora and fauna. The Council also contended that the proposed development would have a significant adverse impact on flora and fauna on the site including on, amongst other things, a population of Brush-tailed Phascogales.

6 Without detailing all of the communications between the parties and appearances before the Court that ensued, it is apparent that the applicant did not comply with the directions made by the Senior Commissioner at least with respect to some of the information to be provided. In consequence, on 24 February 2005 the Registrar referred the matter to the Chief Judge of the Court. The Chief Judge made directions that, amongst other things, gave the applicant a further opportunity to provide the required information (subject to costs orders). By 14 June 2005 the Council was again communicating with the applicant about its failure to comply with the Court's directions. These circumstances culminated in the Council filing and serving its first notice of motion seeking dismissal of the proceedings on 20 June 2005. However, on 21 June 2005, the applicant filed and served a notice of motion seeking to rely on amended plans and yet further time to comply with the Court's directions.

7 The Court dealt with these motions on 22 December 2005. The Court dismissed the Council's notice of motion, granted leave to the applicant to substitute the amended plans and otherwise made orders for the future conduct of the proceedings (as well as various orders for costs). Pursuant to those directions, the Council notified the amended development application in or about January 2006.

8 The matter came before me on 31 March 2006 for a further case management conference. I made extensive directions, the purpose of which was to ensure that the matter could proceed to a hearing as soon as reasonably possible. Pursuant to my directions the ecological experts for the Council and the applicant conferred and prepared a joint report of 6 July 2006. This report indicated that a species impact statement (SIS) was required to accompany the development application. Thereafter, the Council filed and served its second notice of motion seeking dismissal of the proceedings on 18 August 2006. The matter came before me on 3 October 2006 at which time I dismissed the Council's notice of motion. I made directions, again with a view to ensuring that the proceedings could be fixed for hearing as soon as reasonably possible, as well as associated orders for costs.

9 The events after October 2006 are disclosed in the affidavit of Mr McKelvey, the Council's solicitor, sworn 23 March 2007. Further survey work was carried out culminating in a letter from the solicitors for the applicant to the solicitors for the Council of 9 March 2007. This letter advised that the applicant's flora and fauna consultants had informed the applicant that "the progress of the matter could be by way of an SIS or by a negotiated environmental outcome". The letter indicated that if an SIS were required it might take as long as six months to complete after obtaining the Director General's requirements. The solicitors for the applicant suggested that the timetable be varied "in order to enable the consultants to meet again to determine whether an SIS was needed or whether a negotiated environmental outcome" could be achieved. On 14 March 2007 the Council's solicitor responded that, in the Council's view, this information did not comply with the directions I made on 28 February 2007. It is apparent that this is so because I directed that the applicant to notify the respondents by 14 March as to whether it considered that a SIS was required or whether the applicant intended to proceed to hearing without a SIS and, in either case, required the applicant to serve its proposed timetable for the future conduct of the proceedings up to and including the hearing.

10 On 14 March 2007, the applicant's solicitors again wrote to the Council's solicitors saying that they were instructed by their consultant ecologist that an SIS was required for the application as it presently stood, that is, without further amendment by "cutting back of the development" and "perhaps" setting aside "compensatory land". In terms of the timetable, the applicant's solicitor said that it would take four weeks to obtain the Director General's requirements (by say 30 April 2007) and that "to carry out the further work likely to be required, say two months, by 31 July 2007", with a further mention before the Court on 7 August 2007.

11 The Council then filed and served its third notice of motion seeking that the proceedings be dismissed. The Council contends that there are two bases upon which the proceedings should be dismissed. First, Pt 12 r 2 (1) and (2) of the Land and Environment Court Rules 1996 provides as follows: (1) If an applicant does not within a reasonable time take any step necessary to bring any proceedings to a hearing, or unreasonably takes any step to avoid the proceedings being brought to a hearing, the Court may, on the application of the respondent, order on terms that the proceedings be dismissed or make such other order as the Court thinks fit.

(2) The Court may at any time prior to the hearing, if satisfied that there is no good reason for the failure of the applicant to prosecute the proceedings, dismiss those proceedings

12 Secondly, Pt 13 r 5 of the Supreme Court Rules 1970, which is incorporated by reference into the Land and Environment Court Rules 1996. The Council contends that there is no reasonable cause of action disclosed and the proceedings are otherwise an abuse of process in the particular circumstances.

13 The basic position of the Council is that, under s 78A(8)(b) of the Environmental Planning and Assessment Act 1979, a development application must be accompanied by a SIS if the application is likely to significantly affect threatened species populations or ecological communities or their habitats. The applicant now accepts that this is such a development application. However, there is no SIS, in circumstances where the Council put the applicant on notice of the significant adverse impact on flora and fauna on the site and the inadequacy of the applicant's information in that regard in its statement of issues dated 9 June 2004, which statement has now been superseded on three occasions by subsequent statements of issues. The Council also notes that the only relevant change to the law was the repeal of the Native Vegetation Conservation Act 1997. The Native Vegetation Act 2003 has replaced that Act. There is a savings provision in cl 35 of the Native Vegetation Regulation 2005 from which this development application benefits. This benefit would obviously be lost with respect to a new development application if one were to be made.

14 The applicant submits that the focus should now be on the conduct of the applicant after 3 October 2006. The applicant says that Pt 12 r 2 is the only relevant power and that none of the circumstances would enliven Pt 13 r 5. The applicant submits that the relevant issue is whether its conduct since 3 October 2006 has in any way been so derelict or inappropriate that such a punitive final action as an order dismissing the proceedings is warranted. It says that this action is not warranted because the circumstances since 3 October 2006 show that there has been default, if any, on both sides, but that no default of the applicant would provide a reasonable basis to conclude that the circumstances in Pt 12 r 2 (1) or (2) are enlivened.

15 The applicant accepts that it does not come before me today in a position where it is able to say what the future conduct of these proceedings with respect to a hearing will be. It submits that it does at least have a proposal to progress the matter, being the proposal set out in the correspondence from the applicant's solicitor to the Council of 14 March 2007. The applicant also emphasises, as the letter of 14 March 2007 discloses, that the applicant's ecologist has carried out some 260 hours of additional survey work in 2007. Finally, the applicant submits, as it did on the last occasion, and as must be the case, that the power in Pt 12 r 2 is one which must be exercised sparingly.

16 I accept that the power in Pt 12 r 2 (and Pt 13 r 5) should be sparingly exercised. I also accept the applicant's submission that the relevant circumstances in this matter seem more related to Pt 12 r 2 than Pt 13 r 5. The difficulty that this matter creates is that the proceedings have been on foot since at least May 2004. It is now March 2007. The applicant now accepts that its development application was and is required to be accompanied by a SIS. The consequence is that there is not a complete development application before the Court. Accordingly, as matters currently stand, the development application appeal cannot proceed to hearing other than a hearing with the inevitable result that the appeal would have to be dismissed. Another difficulty is that the applicant comes before the Court today in the face of a direction that, whether or not it accepted a SIS was required, it propose a timetable for the future conduct of the proceedings up to and including the hearing. Nevertheless, standing here today the applicant cannot suggest any such timetable. When the correspondence from the applicant's solicitor of 9 and 14 March 2007 to the Council's solicitor is analysed, it is apparent (and the applicant's counsel frankly disclosed) that the applicant is not saying to the Council or the Court that a SIS will be lodged by 31 July 2007. Rather, it is saying that work will have been done by 31 July 2007 enabling the applicant to inform the parties and the Court on 7 August 2007 how much further time is in fact required in order to lodge the SIS. This information is to be understood in the context of the indication given in the correspondence of 9 March 2007 that the SIS may take six months or longer to complete. It is for this reason that the applicant seeks a further adjournment of the proceedings to 7 August 2007. On that date the applicant would inform the Court of how long it would need in order to prepare its SIS.

17 The inevitable result will be that on 7 August 2007 the proceedings would have to be adjourned again and presumably for a relatively lengthy period for numerous reasons. First, to enable the SIS to be prepared, filed and served. Secondly, and assuming no further amendments to the proposed development were made as a consequence of the SIS, to enable the development application to be notified in accordance with the particular statutory requirements for notification of developments likely to significantly affect threatened species. Thirdly, to enable the Council to again consider the issues in the proceedings having regard to the SIS. The inescapable conclusion is that, although these proceedings have been on foot for the best part of three years and although the Council put the applicant squarely on notice that the proposed development was likely to have a significant adverse effect on flora and fauna, the applicant has now accepted that a SIS is required. It has now accepted that in consequence its development application is incomplete and that, inevitably if the matter were to proceed to hearing at this time, the result would be that the development application must be refused.

18 I do not accept the applicant's submission that the sole focus of the discretionary exercise under Pt 12 r 2 should be on the conduct of the applicant since 3 October 2006. The whole of the circumstances of the proceedings are relevant. In any event the fact is that since 3 October 2006 the applicant has still not managed to place its development application in a position where it would be able to be determined by the grant of development consent.

19 I think it is also relevant to the exercise of the discretion that I am informed that the only change in the relevant legal position relates to the native vegetation legislation. This change does not have the effect of prohibiting the proposed development. Moreover, in Class 1 proceedings, nothing can stop the applicant from now preparing a fresh development application relevant to circumstances in 2007 and seeking to obtain development consent (recognising that the present development application was in fact lodged in the year 2000). Accordingly, the ecological work that has been carried out by the applicant in 2007 in that event would not go to waste.

20 It seems to me that the circumstances are different from those I considered on 3 October 2006 when I dismissed the Council's notice of motion (Mahogany Ridge Developments Pty Limited v Port Stephens Council & Anor [2006] NSWLEC 657). The circumstances are also different from those in Marinkovic v Rockdale City Council [2006] NSWLEC 601. In Marinkovic the parties were able to accept a direction that they approach the Registrar on that day to obtain a hearing date. The circumstances are different from those considered in Dunlop v Coffs Harbour City Council [2006] NSWLEC 663 in which Lloyd J emphasised that the power both under Pt 13 r 5 and Pt 12 r 2 must be exercised, if at all, only with caution. Lloyd J was not willing to exercise those powers where the applicant's position was that the case was ready for hearing. Here, the applicant is a very long way from being able to inform the Court to that effect.

21 In my view, this is an exceptional case where the Court should find that the applicant has not, within a reasonable time, taken the steps necessary to bring these proceedings to hearing within the meaning of Pt 12 r 2 (1) of the Land and Environment Court Rules 1996. The applicant has been on notice from the Council of the issues with respect to ecological impacts since June 2004. Indeed, the applicant's own position as long ago as July 2006 appears to have been to a similar effect that a SIS was required. Yet we are here today with the applicant not having a SIS and not being able to inform the Court when a SIS will be provided.

22 I am satisfied that there has been a failure to prosecute the proceedings within Pt 12 r 2. In the circumstances I have identified it would be wholly unreasonable and inappropriate to allow the applicant to maintain these proceedings and to grant the applicant the adjournment it seeks until 7 August 2007. In my view, there is no reason why the applicant should obtain yet a further indulgence from the Court to have the adjournment to 7 August 2007. Leaving aside the absence of the SIS, I would order the parties to obtain a hearing date today. As counsel for the Council submits, such an order would be futile as the inevitable result is that the proceedings will be dismissed due to the inadequacy of the development application. Because I am not willing to adjourn the proceedings and I am satisfied within Pt 12 r 2, I am going to order that the proceedings be dismissed and accordingly uphold the Council's notice of motion. I make an order that the proceedings are dismissed. [Counsel addressed on costs]

23 I make the following orders: (1) The proceedings are dismissed.

(2) List the proceedings for mention before the Registrar (regarding costs issues) on 17 April 2007. ****************************

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